Depreciation in a Sole Trader
Hoping you can help. I have done a set of sole trader accounts including a balance sheet and little bit confused. I have a net profit but when i depreciate the assets, the profit falls (obviously) and then the amount that gets carried to the capital account is the "less depn amount". Is this correct? Will I then do a seperate calculation for tax calc and add back the depn to get the taxable profit and subject it to the usual tax rules? My question is that if I do it like that, then the capital account amount is the less depn amount so potential for drawings is less. Am i missing something obvious here?